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While the major stock indices are under considerable selling pressure world-wide, will this period of panicked selling actually help investment managers with the performance of their portfolios?

From MarketWatch.com:

Consider a study conducted by Ned Davis Research, the quantitative research firm. It identified what it considered to be the 28 worst political or economic crises over the six decades prior to the 9-11 attacks—beginning with the Fall of France in 1940 and Pearl Harbor in 1941.

In 19 of these 28 cases, according to the firm, the Dow Jones Industrial Average  was higher six months after the crisis began. The average six-month DJIA gain following all 28 crises was 2.3%.

While past performance does not guarantee similar results this time around, active managers, particularly those with  value and deep value products could find this period to their benefit when it comes to providing market beating performance. At this time, US markets have not even reached correction stage (down 10% or more) so there maybe more downside from here, but some investment managers who have done their research could find good investments that benefit their clients.

Investors, particularly retail investors, need to be reminded by their investment manager to stick to a long-term, balanced asset allocation plan in light of the current panic driven selling.